Reding re-enters regulatory fray

The electronic communications market has been growing so rapidly in recent years that the European Commission hesitated to introduce further regulation. Its approach was to let the regulatory framework established four years ago bed down, allow national regulators to do their job and watch the markets for different services develop.

But this summer Viviane Reding, the commissioner for the information society, returned to the regulatory fray, warning that further action was needed to develop a single market, in which there was true competition.

Among her controversial suggestions unveiled in June were plans for a super-regulator to oversee national regulators and a European spectrum agency that would supervise cross-border trading in airwaves.

Definitive proposals for the review of the EU regulatory framework for electronic commun-ications and services are to be published later this year. According to Reding, a substantial amount of the groundwork for creating an efficient EU market has already been laid by current rules. “The implementation of EU telecom rules and efficient market regulation by independent regulators has been crucial in boosting competition and consumer benefits,” she says.

But Reding is deter-mined to bring about even closer integration of EU markets. National watchdogs fear that this will be achieved by establishing a super- regulator. “It is true that this year, I want to make a decisive step towards the completion of the internal market in Europe,” says Reding. “In the telecoms sector, where neither technology nor economic interest nor consumer behaviour know national borders any more, I see a clear [and] long-overdue need to make the internal market a reality.

“It’s all about bringing Europe up to speed. Variations in regulatory approach are creating obstacles to today’s internal market and to effective competition. This is unacceptable.”

National watchdogs’ attempts to bolster the role of the European Regulators Group (ERG), so that it is better equipped to foster harmonisation across markets, have failed to impress. “Market players, whether incumbents or new market entrants, continuously complain to me about the lack of transparency of the ERG and its decision-making process,” says Reding.

“Market players are primarily interested in efficient and transparent decisions that ensure cross-border competition and investment, so there is no time to waste.”

Ideas for a pan-European market for the trading of spectrum, the natural resource allowing electronic data to be packaged, will also prove contentious. Wrestling control of the allocation of the jealously-guarded airwaves from member states will be difficult. “Spectrum is the lifeblood of the information society and of Europe’s wireless industries. This is why I cannot be satisfied with the current way of managing spectrum in Europe, which is overtly bureaucratic and unable to respond to market forces,” says the commissioner.

Reding has also announced proposals to force mobile operators to lower roaming charges, the fees charged to consumers making or receiving calls from abroad. The industry was infuriated, claiming that EU competitiveness would suffer as a result. “Regulatory intervention must always be a last resort, which is why, in its impact assessment, the Commission considered other possible alternatives including leaving the roaming problem to market and technological forces and self-regulation,” she says. Of all the initiatives announced this year, this could be the one for which she is remembered – for better or for worse.